Halfords has enlisted Sir Bradley Wiggins to to aid its turnaround efforts, after reporting a fall in profits and bicycle sales.
The cycle and car-repair chain is teaming up with the British Olympian and Tour de France winner to launch a new range of affordable, lightweight bikes for under-16s next July to get more children and teens into cycling.
Ahead of Christmas, 34 new children’s’ bikes have just hit Halfords shops along with accessories, including more licensed products, such as Disney Frozen helmets and Minions bikes.
Halfords cashed in on the nation’s passion for cycling in in 2014, when the Tour came to the UK. In June, the retailer reported booming bike sales, which catapulted total annual revenues above £1bn for the first time.
However, bad summer weather this year has been blamed for deterring casual cyclists from upgrading their kit, while price cuts across the market have also hit the company.
Profit before tax and one-off items fell nearly 6% to £46.4m in the first half of 2015. All areas of the business grew except cycling, which experienced a sharp fall in sales in July and August.
Motoring performed well, especially car maintenance where sales rose 6.5%. Halfords is expecting flat profits for 2017, with growth thereafter. Shares in Halfords fell 9% to 391.2p in early trading.
The new chief executive, Jill McDonald, who took over in May, described the cycling sales in the second quarter as disappointing but was confident that Britain’s cycling fever would continue. She announced a new strategy entitled Moving up a gear, which replaces Getting into Gear.
She said: “There are plenty of reasons for us to remain confident that the cycling market will continue to grow over the long term.” Halfords has gained market share in recent years and now accounts for nearly a quarter of Britain’s annual £800m worth of bike sales.
Independent retail analyst Nick Bubb said the new strategy “sounds remarkably like the old strategy, except with a slightly different name”. He added: “The big surprise is that there appears to be no reference to store closures. The nub of the message is that Halfords will continue to invest to modernise the business to sustain long-term growth.”
Halfords has signed up the Irish designer Orla Kiely to design a new range of bikes, accessories and camping equipment for next spring. A new Boardman range of bikes is also coming into the shops, with the Elite series launching on Thursday afternoon, and the Performance series of bikes going on sale in Halfords and Cycle Republic at the end of January.
